Context :
A study released by the Ministry of Finance (Department of Financial Services) at a two-day Chintan Shivir (Feb 13–14, Coorg, Karnataka) highlights that the future of Unified Payments Interface (UPI) and RuPay lies in value-added services beyond transactional convenience.
1. Institutional & Regulatory Framework
- Developer: Launched in 2016 by the National Payments Corporation of India (NPCI).
- Regulator: Governed by the Reserve Bank of India (RBI).
- Parent Organization: NPCI is a “not-for-profit” company under Section 8 of the Companies Act 2013, established by RBI and IBA (Indian Banks’ Association). Operates under the Payment and Settlement Systems Act, 2007
- Technology: Built on the IMPS (Immediate Payment Service) infrastructure.
2. Core Technical Features
- Real-Time: 24/7, 365 days instant fund transfer.
- Single App Interface: Access multiple bank accounts through a single mobile application.
- Two-Factor Authentication: Uses a combination of the “Mobile Device” and the “UPI PIN”.
- Virtual Payment Address (VPA): Eliminates the need to share sensitive details like Account Number or IFSC codes.
- Interoperability: Seamless transfers between different banks and different third-party apps (e.g., BHIM, Google Pay, PhonePe).
3. Recent Evolutions (2024–2026)
- UPI Lite & Lite X: Enables small-value offline transactions using an on-device wallet (for low-connectivity areas).
- *99# (USSD) allows UPI services on basic feature phones without internet.
- Conversational Payments (Hello! UPI): Integration of AI to allow voice-activated payments in multiple Indian languages.
- UPI Tap & Pay: Uses NFC (Near Field Communication) technology for contactless payments at merchant terminals.
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